Romania Tops EU in Tax Collection Gaps, Losing a Third of VAT and Corporate Tax Revenue

• Romania leads the EU in uncollected taxes, losing about one-third of both VAT and corporate income tax revenues.
• In 2019, Romania failed to collect 35% of estimated corporate income tax, three times the EU average.
• The main cause of tax gaps in Romania is tax evasion, while in some other EU countries it is profit shifting and base erosion.
• Persistent fiscal issues are due to unpredictable legislation, unsustainable public spending, and slow digitalization of tax administration.
• Improving tax collection through digitalization and AI is seen as crucial, as simply raising taxes harms the economy and does not solve budget deficits.

Source: blog.pwc.ro

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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